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LG Electronics U.S.A., Inc. v. Actionlink, LLC

Superior Court of New Jersey, Law Division, Bergen

January 29, 2018


          Argued: January 19, 2018.

          Eric Blumenfeld, Esq., appearing for the Plaintiff, LG Electronics, USA, Inc., (from the law offices of Hughes Hubbard & Reed LLP).

          Matthew F. Gately, Esq. and Charles R. Cohen, Esq. appearing for the Defendants, ActionLink LLC, (from the law offices of Cohn Lifland Pearlman Herrmann & Knop LLP).


          Honorable Robert C. Wilson, J.S.C.


         THIS MATTER arises from a dispute regarding a Master Services Agreement dated August 26, 2010 and two incorporated Statements of Work dated December 1, 2010 and April 1, 2012 between LG Electronics U.S.A. Inc. ("LGEUS") and ActionLink LLC ("ActionLink"). On June 3, 2015 LGEUS filed their complaint against ActionLink, claiming that the Defendant intentionally overcharged LGEUS by approximately $1.8 million for a fleet vehicle program that ActionLink created pursuant to the above agreements. The three counts of LGEUS's complaint are breach of contract, common-law fraud, and breach of the implied covenant of good faith and fair dealing.

         LGEUS now moves this Court for leave to amend their complaint in three ways. First, Plaintiff asks to add a quotation from the Master Services Agreement. Second, to change the word "any" to "quarterly" in paragraph eighteen of the complaint. Third, to amend the ad damnum clause under count two of the complaint to demand punitive damages for the alleged common-law fraud. Defendant ActionLink opposes the Plaintiff s motion, and cross-moves for dismissal of the Plaintiffs common law fraud claim. The Defendant argues that common law fraud is not actionable in this case pursuant to the economic loss doctrine and the Plaintiffs failure to plead fraud with the requisite particularity.


         I. LGEUS May Amend their Complaint to include the Word "Quarterly" and the Quote from the Master Services Agreement because those Amendments do not Prejudice ActionLink and are not Futile.

         New Jersey Rules of Court provide that "[a] party may amend any pleading ... by leave of court which shall be freely given in the interest of justice." K 4:9-1. While motions for leave to amend pleadings are to be liberally granted, they are best left to the sound discretion of the trial court in light of the factual situation existing at the time each motion is made. Kernan v. One Washington Park Urban Renewal Associates. 154 NX 437, 457 (1998) (citing Fisher v. Yates, 270 N.J.Super. 458, 467 (App. Div. 1994)). "That exercise of discretion requires a two-step process: whether the non-moving party will be prejudiced, and whether granting the amendment would nonetheless be futile." Notte v. Merchs. Mut. Ins. Co., 185 NX 490, 501 (2006). "If a claim does not arise until after a complaint has been filed, leave to amend to add that claim should be granted as of course so long as the moving party has exercised due diligence and the amendment will not cause the trial to be unduly delayed or complicated." State v. Standard Tank, 284 N.J.Super. 381, 396 (App. Div. 1995). A motion to amend is properly denied where allowing the amendment would unduly protract the litigation. Pressler, Current N.J. Court Rules, comment 2.2.1 on R. 4:9- 1 (2015). Although any asserted prejudice must amount to more than mere inconvenience, if "the proposed amendments requires the reopening of discovery, the prejudice to the non-moving party will be considered greater than if the proposed amendment presents only a new issue of law." Violas v. General Motors Corp.. 173 F.R.D. 389. 396 (D.N.J. 1997) (citing Harrison Beverage Co. v. Dribeck Importers. Inc.. 133 F.R.D. 463. 469 (D.N.J. 1990)).

         Here, LGEUS may amend their complaint to substitute the word "quarterly" instead of "any" and to include the quote from the Master Services Agreement. ActionLink does not object to the "quarterly" amendment. Instead they claim that the theory of the case represented by this amendment is ultimately of no merit. As such, that portion of LGEUS's motion is granted.

         Second, the amendment to include the quote from the Master Services Agreement is permissible under the Court Rules. The Master Services Agreement is the underlying basis for the Plaintiffs claims here, and as such including a quote from that agreement does not prejudice the Defendant. Further, these amendments do not change or add any cause of action brought by the Plaintiff. ActionLink argues that such an amendment would require the reopening of discovery, because neither party has engaged in discovery regarding the "third party pass through expenses" language. They point specifically to discovery responses by LGEUS that indicate their theory of the case is derived from the Statements of Work and not the Master Services Agreement. This Court notes that ActionLink's arguments regarding the above amendment to include the word "quarterly" apply to this subsequent amendment. If the parties have not in fact collected discovery on the issue of "third party pass through expenses, " such a theory would not prevail at trial and therefore would no prejudice the Defendant.

         Therefore, pursuant to K 4:9-1, these amendments are not futile. The instant amendments do not add new claims and thus, the motion to amend is granted.

         II. Count Two of LGEUS's Complaint is Dismissed Pursuant to the Economic Loss Doctrine and LGEUS's Failure to Plead ...

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